ENGT5219: Assignment A – Analysing a Sustainable Business

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 Contents
ENGT5219: Assignment A – Analysing a Sustainable Business........................................1

Five Capitals........................................................................................................................1

The Circular Economy.........................................................................................................2

Question 1: Description of the Two Models Based on Unilever’s Report..........................2

The Five Capitals Model.................................................................................................2

i. Natural Capital..........................................................................................................2

ii. Social Capital...........................................................................................................3

iii. Human Capital........................................................................................................3

iv. Manufactured Capital.............................................................................................4

v. Financial Capital......................................................................................................5

Circular Economy............................................................................................................5

Question 2: How Unilever Aligns Its Work with the SDGs................................................6

Identifying the two SDGs....................................................................................................6

SDG 3: Good Health and Wellbeing...............................................................................7

Description of SDG 3 and How it is Measured...........................................................7

What Unilever is Already Doing to Support SDG3....................................................8

What Unilever Could Do to Further Their Ambition to Meet SDG 3.........................8

SDG 15: Life on Land.....................................................................................................9

Description of SDG 3 and How it is Measured...........................................................9

 What Unilever is Doing to Support SDG 15...............................................................9

What Unilever Could Do to Further Their Ambition to Meet SDG 15.....................10

References..........................................................................................................................12
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ENGT5219: Assignment A – Analysing a Sustainable Business

Five Capitals

Natural Capital Natural capital is concerned with the

protection and conservation of the natural
environment, natural resources, and the
sustainability of ecological resources. A
sustainable organisation advocates for the
proper energy flow to protect renewable and
non-renewable natural resources, and carbon
sinks, and develop policies for environmental
protection to combat climate change (Vickers
& Cropp, 2020). Therefore, sustainable
businesses operate within the bounds of
regeneration to facilitate the natural
replenishment of natural resources.
Human Capital Human capital is concerned with the extent to
which an organisation advocates for proper
public health, information, and abilities for its
effective and efficient operations. Therefore,
sustainable organisations strive to improve the
health and overall well-being of its employees
and the general public through skills
development and training programs.
Social Capital Social capital looks into the extent to which
an organisation upholds and enhances the
health wealth among its employees. For
instance, promoting industrial relations,
sustainable societies, business partnerships,
and vocation combinations. Organisations like
Unilever create indirect jobs for members of
society to ensure positive employment growth
in society.
Manufactured Capital Manufactured capital requires goods and
infrastructure to convert raw materials into
finished products. This implies that an
organisation must use its assets most
efficiently and sustainably, such as using low-
carbon resources throughout its operations to
support the ambition to achieve net zero
emissions.
Financial Capital Financial capital requires investors to assess
the organisation’s financial returns to
determine its creditworthiness and how its
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financial resources can flow into projects that

benefit society.

The Circular Economy

The Circular Economy Is a robust system that replaced the out-of-

date linear model, and focuses on putting an
organisation’s materials in use to create value
by availing consumer goods and resources
throughout the facility’s lifetime.

Question 1: Description of the Two Models Based on Unilever’s Report

The Five Capitals Model

The Five Capitals Model is essential for understanding Unilever’s sustainable

development since it exposes shares and how assets flow to achieve a sustainable society and

economy. The five capitals model helps business organisations to balance their operations with

the environmental, social, and financial needs to help them understand that sustainability is the

basic ingredient for creating capital and wealth (Resnick et al., 2014). They include natural

capital, social capital, financial capital, manufactured capital, and human capital.

i. Natural Capital

Natural capital means extending the economic notion of capital, which in this case, is

considered the manufactured means of production to produce environmentally sustainable

products and services. It constitutes the stock of natural systems that collectively facilitate the

efficient flow of valuable ecosystem goods and services, both at the present moment and in the

future. Unilever uses natural resources, such as soybean, tomatoes, rapeseed, and oilseed, among

others (Unilever, 2021, p. 27). For example, Unilever supports the use of satellite data and digital

sensors to empower Spanish tomato farmers and enable them to optimise water use and enhance
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soil quality to grow high-yielding and healthy crops. The organisation has planted approximately

465,000 native trees in partnership with Rainforest Alliance farmers (Unilever, 2021, p. 25). It

also supports various sustainability programs, including tackling deforestation as part of

executing its natural capital strategy.

ii. Social Capital

Business organisations can create social capital by adding value to various outputs

through partnerships that create positive human relationships. Social capital is the cost of

connections inside and among the existing social networks of a given organisation. For instance,

Unilever established 37 People Data Centres to generate its social capital by attracting social

media users (Unilever, 2021, p. 12). Today, the organisation has approximately 3.4 billion

people who use its products daily (Unilever, 2021, p. 12). The social capital has increased its

engagement with customers through regular surveys and panels, creating over 4 million

interactions in the form of emails, calls, letters, webchats, and social media (Unilever, 2021, p.

63).

iii. Human Capital

Human capital entails an inventory of an organisation’s abilities and how well it

comprehends its potential to undertake obligations that can generate monetary value. Unilever

engaged approximately 90,000 people to participate in its UniVoice employee survey, a move

that generated significantly huge engagement traffic that far exceeded existing industry

benchmarks (Unilever, 2021, p. 18). Such surveys promote stakeholder inclusion in the

organisation’s activities because workers feel that their views and sentiments are considered

when making crucial decisions.

FIGURE 1
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THE FIVE CAPITALS

Source: (Wustemann, 2023).

iv. Manufactured Capital

Manufactured capital is a means of manufacturing, which encompasses a blend of

physical, material, and technological resources that an organisation can utilise to produce goods

and services to fulfil its long-term purpose (KPMG, 2014). Manufactured capital constitute

infrastructure, goods, and services that an organisation uses to deliver quality. For example,

Unilever strives to achieve quality by meeting everyday nutrition needs, hygiene, and personal

care, while minimising adverse environmental impact. For example, the organisation supports its

sustainable living plan (SLP) to meet all new sustainability requirements (Unilever, 2021, p. 80).

The SLP ensures a robust supply chain that ensures sustainable manufacturing processes that

care for environmental well-being, limit overconsumption, and eliminate inefficiencies in waste,

energy, and water. Also, the organisation supports its Compass project to show its great

sustainability commitments to ensure that its products positively impact customers across its

value chain.
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v. Financial Capital

Financial capital includes an organisation’s cash, credit, and funding sources that give it

greater purchasing power. Unilever generates its financial capital through debts and equity, but

within the sustainability context, it allows people and other businesses to shop for what they

want. The organisation strives to deliver high-quality products and services that are tailored to

the five strategic capital picks to promote growth. For instance, the company uses strategic

choices, such as portfolio, brands, markets, channels, and culture to deliver its vision and

promote faster growth (Unilever, 2021, p. 15). Therefore, the five capitals form the basis for

Unilever’s sustainable development since they provide a clear roadmap for promoting

sustainability, stewardship, and limitless opportunities.

Circular Economy

FIGURE 2

CIRCULAR ECONOMY

Source: (UNCTAD, n.d.).

The circular economy strives to minimise material use, redesign materials, and recycle

products, and ensures that service provision is less resource intensive (United States

Environmental Protection Agency, 2022). The circular economy operates by designing goods
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from reprocessed resources to ensure their reuse and recycling. Unilever’s perception of circular

economy involves addressing major issues, such as climate change, biodiversity loss, pollution,

and waste recycling (Unilever, 2023). Therefore, Unilever incorporates the 3R concept as a

major forefront to the sustainability progress. (Unilever, 2023). The reuse, refill, and rethink

strategy promotes a packaging revolution to avail sustainable solutions to its millions of

consumers to minimise plastic consumption for environmental good.

Question 2: How Unilever Aligns Its Work with the SDGs

Identifying the two SDGs

Sustainable Development Goals (SDGs) are a collection of 17 interlinked objectives that

constitute an urgent call for action by global nations to promote peace and prosperity for people

and the planet. Adopted in 2015, the goals advocate ending poverty and achieving environmental

sustainability by 2030 to expedite economic growth and promote social inclusion. Unilever’s

Sustainable Living Plan (SLP) supports business growth and promotes a reduction in the amount

of environmental carbon footprint to leave a positive social impact on its consumers (Unilever,

2021). Generally, the UN SDGs address the world’s greatest problems, including food insecurity,

education, climate change, gender equality, and sanitation (United Nations, 2021). Unilever

promotes two major goals, including goal 3 and goal 15 to make significant improvements in

health and global biodiversity.

SDG 3: Good Health and Wellbeing

Description of SDG 3 and How it is Measured

SDG 3 aims to promote healthy living and well-being for people of all age groups to

ensure sustainable development. In this regard, SDG 3 is concerned with the recent COVID-19
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pandemic that caused global “excess deaths” and spread the suffering of more than 500 million

individuals across the globe (United Nations, 2021). Specifically, it is estimated that the

pandemic claimed as high as 15 million lives by the end of 2021 and caused other adverse

impacts, including disruption of essential health services, increased mental health issues, such as

anxiety and depression, and reduced life expectancy (United Nations, 2021). Such problems

motivate Unilever to support the globe to stick to its trajectory towards achieving Goal 3 by

emphasising the need for top-notch levels of hygiene. Unilever partners with the health

ministries of various countries to measure SDG 3 by determining the number of hygiene-related

deaths per 1,000 individuals in a given population (United Nations, 2021). The partners also

consider the prevalence of other indicators, such as maternal mortality, tuberculosis, malaria, and

communicable illnesses to make health improvement and safety recommendations where

Unilever comes in to fund vaccinations and support access to universal health coverage to help

end the epidemics by 2030.

What Unilever is Already Doing to Support SDG3

The company’s Lifebuoy improves cleanliness to prevent contagious diseases like Covid-

19 to save lives. The organisation supports awareness campaigns that teach children how to wash

their hands with Lifebuoy detergents to promote hygiene and good health. For example, Unilever

founded the Hygiene and Behaviour Change Coalition under the Lifebuoy umbrella, in

partnership with Domestos and the Government of the United Kingdom, among other partners to

increase the level of hygiene among the masses (Unilever, 2021). At the height of the pandemic,

Lifebuoy also started providing free medical teleconsultation services to create awareness and

sensitise people on hygiene practices that can prevent disease and promote health and well-being.

Such initiatives have enabled Unilever to significantly improve the health and well-being of
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people in developing economies, such as India, Bangladesh, Vietnam, and Pakistan (Unilever,

2021). Also, the organisation promoted the oral health services of the people through its

Pepsodent toothpaste brand, especially in Indonesia, coupled with free dental consultations to

reduce the risk of mental health associated with dental hygiene (Unilever, 2021). Therefore,

Unilever uses its toothpaste products and services to improve the dental health of its services;

hence, this is an effective strategy for diversifying market penetration.

What Unilever Could Do to Further Their Ambition to Meet SDG 3

Unilever can still do more in this area of health promotion to help developing nations

achieve SDG 3. For example, the organisation can still organise educational programs to equip

civilians and residents with the resources and know-how on how to improve their health and

safety, especially at a time when they are grappling with the ripple effects of the Covid-19

pandemic. This can be achieved through awareness campaigns and programs. As people become

interested in such programs, they can meet their everyday health needs and gain knowledge of

how to prevent and manage certain illnesses and support the company with chain marketing

going forward.

SDG 15: Life on Land

Description of SDG 3 and How it is Measured

SDG 15 protects, restores, and promotes the sustainable utilisation of the world's

terrestrial ecosystems to ensure the sustainability of natural resources, such as flora and fauna.

The goal extends to combating desertification and preventing and reducing possible reverse land

degradation that can trigger massive biodiversity loss. Unilever partners with ecosystem

conservation agencies, such as UN Habitat and World Wide Fund to measure the global progress

towards achieving sustainable forest management.

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What Unilever is Doing to Support SDG 15

Unilever recognises desertification and deforestation as serious environmental concerns

exacerbating climate change, and a great percentage of such issues originate from human

activities (United Nations, 2021). Therefore, Unilever collaborates for climate change mitigation,

as evident in its Climate Transition Action Plan that focuses on achieving net zero greenhouse

gas emissions worldwide by 2039 (Unilever, n.d). To achieve this objective, the organisation

supports efforts to half such emissions and ensure sustainable use of products, reduce the Earth’s

temperature, and lessen the severity of the GHG emissions across the value chain.

Unilever restores the global ecosystem by improving livelihoods, minimising

vulnerabilities, and preventing potential risks to the economy (United Nations, 2021). The

company invested €1 billion on Climate and Nature Fund that supports projects intended to

address climate change and advocate for environmental protection, such as forest regeneration.

Unilever organised a specialised team to run the Climate and Nature Fund project in 2021, and

its success saw the company invest another €40 million to support other sustainability projects,

especially those dealing with regenerative agriculture (Unilever, 2021). For example, projects

that aim to reduce greenhouse gas emissions and water use have been prioritised in the latter

project to help reduce such emissions by at least 30%, improve biodiversity, and promote healthy

livelihoods (Unilever, 2021). However, Unilever still needs to do more in supporting

collaborative partnerships to develop land reclamation projects and facilitate the regeneration of

at least 1.5 million hectares of forests, land, and oceans by 2030 (Unilever, 2021).

What Unilever Could Do to Further Their Ambition to Meet SDG 15

Unilever should fund future climate change mitigation projects. Climate change

phenomenon is a major deterrent to sustainable development as it negatively affects the

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livelihoods of millions of people and subjects them to poverty. Therefore, Unilever’s support for

forest management projects to combat desertification and protect, restore, and promote

sustainable use of the global ecosystem can contribute to positive indicators for climate change

mitigation.
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References

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kpmg.com.br/relatoriodesustentabilidade2014/en/capital-

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%20collection,therefore%20in%20fulfilling%20its%20purpose.

Resnick, S., Foster, C. & Woodall, T. (2014). Exploring the UK high street retail experience: Is

the service encounter still valued? International Journal of Retail & Distribution

Management, 42(9), 839–859. http://dx.doi.org/10.1108/IJRDM-05-2013-0090

Unilever. (2021). Purpose-led, future-fit. Unilever Annual Report and Accounts 2021.

https://www.unilever.com/files/92ui5egz/production/e582e46a7f7170fd10be32cf65113b7

38f19f0c2.pdf

Unilever. (2023). Reuse. Refill. Rethink. Our progress towards a packaging revolution.

https://www.unilever.com/reuse-refill-rethink-plastic/

Unilever. (n.d.). Our Planet Plans. https://www.unilever.com/suppliers/partner-with-purpose/our-

planet-plans/#:~:text=Collaborating%20for%20climate,value%20chain%20by%2020391.

United Nations Conference on Trade and Development. (n.d.). Circular Economy. United

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%20circular%20economy%20entails%20markets,economy%20or%20used%20more

%20efficiently.

United Nations. (2021). Sustainable Development Goals. UN Department of Economic and

Social Affairs. https://unstats.un.org/sdgs/dataportal

United States Environmental Protection Agency. (2022, September 29). What is a Circular

Economy? EPA. https://www.epa.gov/recyclingstrategy/what-circular-

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%20and%20products.

Vickers, H. & Cropp, N. (2020). Measures for successful outcomes: The five capitals approach.

A Discussion Paper. https://www.acenet.co.uk/media/5151/ace-five-capitals-report-

2020.pdf

Wustemann, L. (2023). Sustainable Business Management – The Human Capital Approach.

Hosking Associates. https://hosking-associates.com/press/human-capital-assp/